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Summary:

Only a sliver of people who have tried out The Guardian’s iPad edition for free end up subscribing after their trial. But does that small percentage matter? Other publishers also see low premium take-up, The Guardian is more interested in selling ads than subs.

Guardian iPad edition
photo: GNM

Last month, Guardian Media Group used its annual financial disclosure to report it has, so far, attracted 17,000 paying iPad subscribers.

Friday’s full annual report adds there have been 804,000 downloads of that app. Together, this means The Guardian has converted 2.1 percent of users who have tried it to pay for it.

After Apple’s 30 percent commission, those 17,000 iPad subscribers should yield around £118,830 per month, or £1.4 million ($2.1 million) per year, for The Guardian. A Guardian spokesperson tells us:

“The initial three-month free trial for the Guardian iPad edition, which ended in January, distorts the conversion number somewhat. Conversion rates vary every month, but it’s higher than 2.1 percent.”

The apparent conversion rate is, so far, less than the 17 percent of the Guardian iPhone app users who pay £4.99 per year to subscribe (free in U.S.). There are currently 82,000 iPhone subscribers, the publisher tells paidContent.

But there is one major difference between the two – whilst the iPhone app goes on giving readers a few free stories forever, the iPad edition had given everything away for free for three months, and now gives a two-week free trial, before putting up a hard subscriber wall.

The Guardian had struck a luxurious marketing deal with Apple that made it a prominent feature of iTunes Newsstand.

Although 2.1 percent sounds low, it is not necessarily as bad as it sounds…

  • The Times: By early 2011, just 0.82 percent of people who had taken a free trial with The Times had converted to subscribe to its iPad app, according to a marketer which did reach-out for the publisher.
  • Future Publishing: The magazine publisher in January said it had clocked 75,000 iPad Newsstand subscriptions from 9.3 million downloads of its free taster apps. That’s 0.80 percent.
  • Guardian: Although the app launched in October, the sales effort only got serious in January, when the lengthy free period ended.

The Times declined to disclose latest figures to paidContent, saying total subscription revenue, which it does not report, is a more useful metric than conversion rate.

The Guardian is less interested in either the tablet or mobile paid avenues than it is in web ad sales. It is committed to exploiting the web opportunity to distribute so-called “open” journalism. Its tablet edition is a reformatted edition of its pay-for newspaper, but includes some content from its free Guardian.co.uk website.

Guardian News & Media made £14.7 million from digital advertising last year, and another £31 million from other digital operations, principally Soulmates dating.

That made digital (£45.7 million) almost a quarter of GNM’s total £196.2 million in annual revenue. But GNM’s pre-tax loss grew significantly to £43.8 million, partly due to the costs of restructuring, including making people redundant, for its “digital-first” future.

Disclosure: Guardian News & Media is an investor in our publisher Giga Omni Media.

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  1. I’d argue that if the Guardian ever gets around to digitising the Observer and would offer a “pay as you read” model they’d convert a damn sight more than 2%. As it is, this digital reader wil continue to but his weekend papers though PressReader

  2. Robert –

    Do those conversion numbers include the Guardian’s print readers who have connected their accounts to the app?

    1. Damon,
      iPad-only subs, not including print subs.

      1. So, their actual conversion rate will be higher than 2% as some fair number of print subscribers are counted in the overall download number.

  3. GraemeInLondon Monday, August 13, 2012

    This just goes to show that paid apps are a transition business model, not one that will support an existing publisher business ongoing.

    These are the uber-loyallists, people who will pay month after month. For any brand, this will be a tiny percentage. And remember, we are at the beginning, relatively, of print-to-online transition, and circulation will drop further – faster than these digital subs will grow.

    Plus: free is still a cool option. And media brand loyalty is not as firm as it used to be (originally driven by print). More people browse these days, getting their news from facebook or Google News, rather than a dependancy on one media brand – and that means free-to-view is the only business model on which to build a sustainable media business.

    The trad publishers have all made cuts. But they all need to have a cost base that can be supported by online free-to-view. Paid apps are not the saviour, and I think many are realising this now at Future, Guardian etc.

    Points above relate to consumer titles, not b2b/

  4. Greg Golebiewski Monday, August 13, 2012

    “The Times declined to disclose latest figures to paidContent, saying total subscription revenue, which it does not report, is a more useful metric than conversion rate.”

    It is, but only if you do not include the opportunity cost. For example, had they implemented a payment model that results in a 3% conversion rate and does not require a 30% fee, then the revenue and the profits would have been larger and the current model less attractive. And, this is what publishers must do: try different models.

  5. Dennis McDonald Monday, August 13, 2012

    If I pay do I still have to see ads?

  6. 14.7 GBP for advertising on a site that has over 30M uniques? That’s comically bad for a news site that size. I would fire everyone in their advertising department.

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